Shareholders of Corporate Executive Board Co. (NYSE: CEB) looking to boost their income beyond the stock's 1.4% annualized dividend yield can sell the March 2015 covered call at the $75 strike and collect the premium based on the $3.10 bid, which annualizes to an additional 12.9% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 14.4% annualized rate in the scenario where the stock is not called away. Any upside above $75 would be lost if the stock rises there and is called away, but CEB shares would have to advance 2.7% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 7% return from this trading level, in addition to any dividends collected before the stock was called.
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